5 steps to invest in the best ULIP

We outline the steps involved in buying into the perfect ULIP scheme.

As a person with a regular income, several financial responsibilities and many dreams to realise, you are always on the lookout for investment options that augment your income over the years. One such option to consider is the ULIP scheme.

What is ULIP?

A ULIP (Unit Linked Insurance Plan) is a life insurance policy that insures the life of the insured and also provides market-linked returns on the investment. Thus, it provides a gateway for future wealth with systematic annual investment.

This is how you can buy the best ULIP plan in India:

1. Assess your requirement. Your personal and familial needs in the future encompass household expenses, potential medical emergencies, children’s education, etc. Check the ULIP scheme’s annualised return rate ever since inception. The higher the rate of return, the more reliable that particular ULIP scheme’s growth trajectory is. When you assess how much the maturity corpus should be, you must calculate future needs as well as inflation. Normally, a corpus that is over 10 times your present annual income is ideal.

2. Find out which plans are the best. Most insurance providers have ULIP schemes, but you must team up with the best ULIP plans in India for maximum benefit. This will take a fair bit of research and talking to insurance brokers and the insurance providers themselves. Check up the plan features, whether it covers all your needs, what the purchase process is like, and so on. An important factor is also the provider’s claim settlement ratio – this comes into play when the family of the insured needs to redeem the plan on the latter’s unfortunate demise.

3. Find out the premium. The premium payment on the ULIP plan is an important determinant for whether you will buy it or not. Check the premium for the best ULIP plan in India by using the insurance provider’s online calculator. You can also find out if you can set up a monthly payment system if you prefer to pay smaller sums instead of a large lump sum annually.

4. Check the pay-out mode. The best ULIP plans in India offer the pay-out on the ULIP scheme in one go, but you may explore the different options on offer. More to the point, find out how the scheme money is paid in case you are absent while the plan is still live – your family should not be made to run around for the money in your absence.

5. Purchase the ULIP scheme online. Now that you are fairly certain of which ULIP scheme to buy, you can proceed to purchase it online from the insurance provider. The purchase is deemed final when your payment is processed and the insurance provider issues an acknowledgement of the same.